Prothena (PRTA) Reports Wider-than-Expected Loss in Q4

Prothena Corporation plc PRTA reported a loss of $1.41 per share in the fourth quarter of 2016, wider than both the Zacks Consensus Estimate of a loss of $1.24 and the year-ago loss of 76 cents.

Moreover, quarterly revenues came in at $0.2 million, down 44.3% primarily due to lower contributions from the collaboration agreement with Roche Holding AG RHHBY. Revenues missed the Zacks Consensus Estimate of $0.3 million as well.

Research and development (R&D) expenses were $39.8 million, up 122.7% year over year primarily due to increased expenses for product manufacturing, clinical trials and personnel costs.

General and administrative (G&A) expenses were $9.6 million, up 44.9% year over year due to higher personnel costs.

2016 Results

Revenues came in at $1.0 billion, down from $1.6 billion in 2016 and missed the Zacks Consensus Estimate of $1.2 billion. Loss per share came in at $4.66 compared to a net loss of $2.66 per share in 2015 and wider than the Zacks Consensus Estimate of a loss of $4.50 per share.

2017 Outlook

Prothena expects net cash burn from operating and investing activities in the range of $160–$170 million. The projected range included an expected milestone payment from Roche upon initiation of the phase II study on PRX002. The company expects to end 2017 with approximately $224 million in cash, cash equivalents and restricted cash (midpoint).

Pipeline Updates

Prothena continues to progress with the candidates in its pipeline. The company is evaluating its lead candidate NEOD001 in the phase III VITAL Amyloidosis study in newly diagnosed treatment-naïve patients with AL amyloidosis and cardiac dysfunction. Patient enrollment in the VITAL study is expected to be completed in the second quarter of 2017.

Earlier, Prothena presented encouraging results from a phase I/II study on NEOD001. The results showed improvement in three organ systems (cardiac, renal and peripheral nerve) in previously treated patients with AL amyloidosis upon treatment with NEOD001.

Prothena is also evaluating the candidate in a phase IIb study, PRONTO, in previously treated patients with AL amyloidosis and persistent cardiac dysfunction. The company expects to complete enrollment in this study during the last week of February. Top-line results from the study are expected following the 12-month study period in the second quarter of 2018.

Moreover, Prothena is evaluating PRX002, in collaboration with Roche, for the treatment of Parkinson’s disease and other related synucleinopathies. The company expects to initiate a phase II study in patients with Parkinson`s disease in 2017.

The company expects to report top-line data from a phase Ib multiple ascending dose, proof-of-biology study on PRX003 in patients with psoriasis in the third quarter of 2017.

Alongside, Prothena is also working to advance PRX004 in a phase I study in patients with ATTR amyloidosis. The candidate is expected to enter clinic in 2018.

Our Take

The wider-than-expected loss in the fourth quarter was disappointing. Nevertheless, the company’s efforts on developing its pipeline are encouraging. We expect investor focus to remain on further updates from its late-stage candidate, NEOD001.

Sucampo’s earnings estimates were stable at $1.22 for 2016 but have increased from $1.69 to $1.74 for 2017 over the last 60 days. The company posted a positive earnings surprise in all the four trailing quarters with an average beat of 35.5%.

Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively, over the past 60 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.

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